A Bank currently offers traditional banking services, from which they generate an average return of 8% while
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A Bank currently offers traditional banking services, from which they generate an average return of 8% while bearing a risk () of 2%. They are planning to allocate 45% of their activity to non-traditional services from which they expect an average return of 15% while bearing a risk () of 8%. The correlation () between traditional and non-traditional revenues is -0.6. What would be the expected return of this portfolio of "2 assets"?
Related Book For
Foundations of Financial Management
ISBN: 978-1259024979
10th Canadian edition
Authors: Stanley Block, Geoffrey Hirt, Bartley Danielsen, Doug Short, Michael Perretta
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